Jag Grewal

Jack McCabe, real estate commentator, was considered the purveyor of doom a few years ago.  After reading his comments in the Tribune Monday, June 28th article, he now seems to be on the cutting edge of Florida commercial real estate.  Let me just say that I thoroughly agree with his assessment of the market and have been saying exactly the same thing for some time.

The last time I blogged about short sales I talked about my client, Bob.  Bob owns a 2,500 square foot office condo built in 2006 that he was upside down on and he was forced to stop paying his mortgage as his business had slowed significantly. Bob asked me to do BPO to list the property for sale.  Once he took these proactive steps his bank was very receptive to talking with him about how to make the loan current.

Bob holds a $600,000 mortgage and the property is now worth considerably less.  The bank has been working with him and hopefully they will be modifying the loan. The bank’s other option is to look at a short sale. I believe that this scenario is going to become more the standard practice.  Short sales are going to be the way to go with trouble commercial real estate.

The process of a commercial short sales is much quicker than residential short sales in my experience and I believe this is due to the nature of commercial lending in general.  Commercial lending is a much more personal relationship.  usually the borrower has a good relationship with his banker from the onset. Things move much faster and decisions are made quickly.

To summarize, commercial short sales are going to be the future of commercial real estate business.  If you are underwater on your mortgage, call me and I will be more than happy to share my experience and knowledge of the process.

Jag Grewal has closed $7.96M of commercial property transactions during the first six months of 2010, and has over 25 years of commercial real estate experience.

This report begs the question, how many people in our market missed similar opportunities because they believed there was no end in sight to the boom. The damage done to the financial well being of persons of this ilk is untold and begs the $64 million question, will values ever return to what were champagne levels and if so, when.

From my perspective there are some situations where the value of some real estate, in particular vacant land, will never return to previous levels until such time as a healthy demand can be demonstrated for the end product.

It will also be some time before financing is available for any development that has a hint of speculation to it. If there is a moral to this story, maybe it is that you should never refuse a glass of champagne, particularly when it is chilled to perfection.

http://www.heraldtribune.com/article/20100618/ARTICLE/6181042

Jag Grewal

Recently, Jag Grewal, commercial Realtor with Ian Black Real Estate, hosted a seminar for commercial property owners to explore their options regarding declining rents, increased vacancies and loan defaults.

Click here to read the full story, as reported in the Sarasota Herald Tribune.

The panel included Jag Grewal, Jo Ann Koontz, PA, Christopher Boss,PA, and Brad Cox, Senior Vice President with Thomas D. Wood & Company.

Ian Black

Time certainly goes fast when you’re having fun.  There is no doubt that the first six months of 2010 have been “funner” than the first six months of 2009.

In looking at our company’s results, I am happy to report that the gross fees earned for the first six months of 2010 will more or less equal the gross fees earned for all of 2009.  The number of transactions for the first 6 months of 2009 and 2010 are also surprisingly the same.

What can we learn from these numbers and what does it say about the current market?

Like many businesses we made significant changes to our “modus operandi” during 2009:

1.  We moved into larger premises that I am fortunate to own and were able to make renovations to the property to make it suitable for our use.

2.  We added two of Sarasota’s top brokers to our team (a third was added in 2010).

3.  We invested time, effort and money in improving our technological marketing efforts.

4.  We employed the services of a full-time marketing director.

5.  Finally, we did what we always do, which is focus on serving the interest of our clients even though the monetary awards were not as great as in the past.

What can these results tell us about the future?

The economic model is to a large extent driven by confidence.  There is definitely more optimism out there which is encouraging business owners to do things that they would not have considered doing 12 months ago.  Our level of inquiry has increased substantially and we are working with major national companies who would have been in hibernation in 2009.  Our leasing activity is still the majority of our business and any sales activity is still mired in complexity.  How banks, financial institutions and owners will deal with their troubled assets is still a work in progress.

If there is a lesson to be learned from our experiences of the past 18 months it would be that there is a new pardigm emerging in commercial real estate.  I know one thing for sure, it ain’t business like it used to be and that is OK.

Jag Grewal

There’s a new shift in pricing.

There are many commercial property owners who have got their head in the sand and are still hoping that this economy will change drastically.  Tantamount to getting an oil tanker heading to the South Pole to turn on a dime.  It’s going to take a while to do it.

The point is, the sooner property and land owners recognize and embrace the facts of the market, the better.  Here are the facts:  you are competing against owners who bought buildings at deep discounts and are out marketing the properties at significantly lower lease rates and/or you are competing against owners who have realized that a dollar coming in the door is one less dollar they must find to go out the door and making deals to generate any income at all.  This is the free market and this is the reality.

Consider this chart and decide whom you wish to be, Property Owner A or Property Owner B.  At any fixed point in time, Property Owner A is always pricing just above the market and Property Owner B is just below the market.  Property Owner B will get the tenant, almost guaranteed and as we move forward in time during a down market, he will continue to get the tenants while Property Owner A continues to chase the market.

Can you tell me, what other options than pricing in front of a down market is there.  The idea here, is to beat the market, you cannot pick the market.

Ian Black

Are we to take any lessons from the current political changes occurring in the United Kingdom, where the voters appear to be tired of the right side and the left side of the equation and have stumbled into a political arrangement that may help to avert a crisis.

The leader of the Conservative Party has cut a deal with the Liberal Democrats to build a center right coalition. Both Parties have had to sacrifice their different ideologies for a pragmatic platform that can trim the welfare state and raise taxes while still funding the things that lead to long term growth.
When pragmatism replaces ideology things might change.

As I continually remind those out there who still listen to me, in all my 46 years in the commercial real estate business I have never encountered market conditions such as those that exist today.  Our panelists treated us to the intricacies of closing real estate transactions when the mortgages exceeds the proposed contract price.  In other words, selling a property that is “underwater”.

I am sure that I speak for most of the audience, which interestingly enough comprised a good cross section of real estate investors, owners, attorneys, brokers, and hotel owners, that we all came away with a better understanding of what is fast becoming the norm in trying to close commercial real estate transactions.

We are planning on holding more of these seminars and if commercial real estate is your shtick, you owe it to yourself to come to our next event.

Don’t miss the opportunity to learn more about Commercial Short Sales by attending this informative seminar hosted by a panel of industry experts this Thursday, May 13th.

For more information and to register call 941.906.8688 or Email jag@ian-black.com

]]> http://ianblackrealestate.wordpress.com/2010/05/09/commercial-short-sales-seminar-may-13th-2010/feed/ 0 Ian Black Real Estate short sale.indd http://ianblackrealestate.wordpress.com/2010/05/05/say-no-to-amendment-4/ http://ianblackrealestate.wordpress.com/2010/05/05/say-no-to-amendment-4/#comments Wed, 05 May 2010 15:37:31 +0000 Ian Black Real Estate http://ianblackrealestate.wordpress.com/?p=76 ]]>

Ian Black

Update to this post 5.5.10

AMENDMENT 4 OPENS THE FLOODGATES FOR SPECIAL INTEREST LAWSUITS

By Ryan Houck

This November, voters will be faced with a number of tough decisions at the ballot box.  Fortunately, one of the most important decisions should also be the easiest.  Amendment 4, a “Vote on Everything” proposal, would kill jobs, raise taxes, and lead to endless litigation at taxpayer expense.

Amendment 4 has been referred to as a ‘stimulus package for special interest lawyers’.  And for good reason; this proposal would add costly new layers of bureaucratic red-tape to an already complicated planning process.  It would be virtually impossible to condense thousands of pages of technical planning data into the 75 word ballot summaries that are required by law.  Inevitably, disagreements – and lawsuits – would ensue.  Amendment 4 encourages the special interests that lose at the ballot box to take their case to court, at taxpayer expense.

That is exactly what happened to the small town of St. Pete Beach, which implemented a local version of Amendment 4 in 2006. The measure has decimated their economy and created chaos at the polls. To date, the citizens of St. Pete Beach have seen nearly a dozen lawsuits that have cost local taxpayers more than three-quarters of a million dollars in legal fees. When St. Pete Beach voters approved four pro-economy changes to their comprehensive plan in 2008, Amendment 4 lawyers sued to overturn the results of the election. Nearly two years later, the people of St. Pete Beach are still defending their vote in court. Ward Friszolowski, the former Mayor of St. Pete Beach wrote “Our experiment in Amendment 4 has turned St. Pete Beach into a battleground for special interests.”  The same “copy and paste” lawsuits that plague St. Pete Beach would soon spread to every Florida town.

Moreover, under Amendment 4, residents most impacted by local planning decisions will lose influence in a process that inherently favors deep-pocketed special interests. This measure would turn the growth management debate into a political spectacle.   Neighborhoods would lose representation in the public planning process, as communities across town make decisions about schools, hospitals, jails, and landfills in your backyard.

Worse still, Amendment 4 will introduce new delays into the planning process. This measure is so extreme that it does not even contain exceptions for vital community projects like hospitals, schools, police stations or fire trucks.  Consequently, even important and uncontroversial community projects will likely experience paralyzing delays.

As Florida attempts to recover from this devastating recession, the last thing we need is Amendment 4, a proposal that would empower special interest lawyers to raid taxpayer’s pockets in order to finance special interest lawsuits.  This November, VOTE NO on Amendment 4!

ORIGINAL POST:

For all of you out there who may not be aware of the proposed Amendment to the Florida Constitution that will be brought  to the ballot in November of this year, my recommendation is that you become knowledgeable about it so you can vote accordingly.

This effort, thinly disguised as “hometown democracy” reeks of Americana and apple pie, but is the proverbial “wolf in sheep’s clothing”.

Amendment 4 poses one of the greatest threats to Florida quality of life and economy.  This “vote on everything” amendment would force thousands of changes to local government comprehensive plans each year at the ballot box.

Is this not un-American and contrary to the Pledge of Allegiance,  wherein every American pledges allegiance to a republic. The very core of representative democracy is totally undermined by this ill-conceived effort being forced on the electorate under the guise of save our beaches and wetlands.

My blog does not permit me enough space to elaborate on – The Fight Against Amendment 4, however I have attached a PDF file that provides a question and answer, and a link for further information.  According to well known “tree hugger” Commissioner Jon Saxton who is a leading opponent of Amendment  4, last year Sarasota County enacted 6 Amendments to our comprehensive plan. There were at least 25 public hearings to facilitate these actions which all passed.  Can you imagine the expense and confusion if each of these Amendments were subjected to a public referendum.  If you need any further convincing as to the futility of this proposal, contact any public official or tax payer in the City of St. Petersburg Beach who have been living under an Amendment 4 type of government for the past 4 years.

SRMagFeb2010Final100128114711 31

Watch the video!

Gulf of Mexico Oil Catastrophe

Being the eternal optimist, I always try to find some good news amongst the bad news.  Hopefully, the latest explosion in the Gulf of Mexico and the subsequent collateral damage to our fragile environment will be sufficient to bring all those “drill baby drill” proponents to their knees.
The prospect of drilling platforms off the coast of southwest Florida (even though they would be 90 miles out in the Gulf) was never a source of comfort to myself and many others in our community.  It is my fervent wish that this tragedy stimulates a rush to finally remove our dependency on fossil fuels and redirect these resources into alternative means of energy.

The removal of this dependency will have far reaching impacts that have been widely publicized, including the impact of such a policy on our Middle Eastern relationships.

If we can send a man to the moon we can surely lead the way with such an initiative.